Tag: Ted Godbout

House Panel Votes to Rein in Large Retirement Account Balances

Mary Pat Campbell

Link: https://www.asppa.org/news/browse-topics/house-panel-votes-rein-large-retirement-account-balances

Excerpt:

Mega-Roth, backdoor IRAs and large retirement account balances would be limited under legislation approved Sept. 15 by the House Ways and Means Committee.

In a near party-line vote of 24-19, the changes were approved as part of the $3.5 trillion Build Back Better Act reconciliation recommendations that address everything from implementing infrastructure development and green energy incentives, to expanding Medicare, offering paid family and medical leave, and extending Trade Adjustment Assistance. 

….

These revenue-raising retirement proposals are included in Subtitle I, “Responsibly Funding Our Priorities,” along with a host of other individual and corporate tax increases. The Joint Committee on Taxation estimates that these tax changes would raise approximately $2.1 trillion over 10 years to help pay for the fiscal year 2022 budget reconciliation bill. (For a more detailed description of the retirement-based revenue proposals, click here.)

Author(s): Ted Godbout

Publication Date: 16 Sept 2021

Publication Site: American Society of Pension Professionals & Actuaries

Multiemployer Plan Bailout Caps Benefit Plan Limits

Mary Pat Campbell

Link: https://www.asppa.org/news/multiemployer-plan-bailout-caps-benefit-plan-limits

Graphic:

Excerpt:

Legislation before the House Ways & Means Committee plans to help pay for a multiemployer plan bailout by utilizing a budget “gimmick” that would freeze retirement plan contribution limits—though not for collectively bargained plans. 

More specifically, the Butch Lewis Emergency Pension Plan Relief Act of 2021, included as subtitle H of a nine-part package that the committee plans to mark up this week, would impose a cost-of-living freeze on:

the Code Section 415(c) annual contribution limit for defined contribution plans; 

the Section 415(b)(1)(A) annual defined benefit limit; and 

the Section 401(a)(17) annual compensation limit. 

This appears to be designed to fill a budget hole in the 10-year scoring window—and as such would freeze these limits starting in calendar year 2030.[1] Ironically, it’s scored to lose money in the years leading up to the effective date, apparently anticipating that individuals will be inclined to increase contributions before the limits are imposed. 

Author(s): TED GODBOUT AND NEVIN E. ADAMS

Publication Date: 9 February 2021

Publication Site: ASPPA